There had been speculation that economists in Brussels would opt for a smaller increase given the crises triggered by the collapse of three U.S. financial institutions last week.
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The European Central Bank is increasing its base interest rate by 0.5 percentage points — despite a crisis that is gripping the banking sector.
There had been speculation that economists in Brussels would opt for a smaller increase given the crises triggered by the collapse of three U.S. financial institutions last week.
Panic has now spread to Credit Suisse, which has uncovered "material weakness" in its financial reporting — meaning it has needed to borrow $54 billion.
ECB President Christine Lagarde indicated that the battle to bring inflation under control is a more pressing priority.
And while she said that Europe's banking system is "resilient," she warned that "inflation is projected to remain too high for too long."
All eyes will now be on the Federal Reserve in the U.S., which is expected to introduce its own rate hike next Wednesday.
There has been growing confidence among traders that the central bank will opt for a more modest 0.25 percentage point rise following the collapses of Silvergate, Silicon Valley Bank and Signature — with the latest Consumer Price Index reading coming in at 6%.
While that figure remains considerably higher than the target of 2%, inflation is starting to come down after surging beyond 9% last year.
After spiking at nine-month highs of $26,514 earlier in the week — reassured by the U.S. government taking control of Silicon Valley Bank — Bitcoin has cooled in recent days.
It was trading at $24,870 on Thursday — and while it had gained just 0.54% over the past 24 hours, the world's biggest cryptocurrency was still up 14.5% on the week.
